So my “bribe” (term coined by a reader) did not work and I failed to get those 50 followers on my Twitter account. Still, I decided to go through with my plan and write up a trade idea every night for the next 4 days. After all, what’s losing a bit of sleep for my readers? Right…?
Trade Idea: 2011-5-16 3:03
My first idea for the week is breakout play on USD/CHF. It looks like the pair is just consolidating now, forming what seems like a bullish flag. I think buying the pair when it closes above .8950 is a good idea.
BUT, I wouldn’t buy immediately at the break of the Asian trading session high because the pair could get rejected.8950 again. It’s probably better to wait for a strong close above .8950 and aim for around .9000.
On the other hand, if you’re bearish on the pair, then perhaps selling the pair at around .8915 also is a good idea. You’ll have to adjust your stop quickly though as it is counter-trend. Who knows, it may only retrace some of its upward move before resuming the move up.
On the fundamental side of things, it looks like traders are putting their money back into the U.S. dollar. Risk aversion seems to be coming back in vogue as problems Europe remain in the limelight.
Many analysts have been saying that Greece would likely default, and that it would need to restructure its debt. That’s a bad thing for Europe, as a lot of other member nations are exposed to Greek debt.
Now, I know that Switzerland isn’t Greece, but it is part of Europe. Bad news from euro zone could spill over to the Switzerland and have a negative effect on their currency.
Alright, that’s my trade idea for the day. If circumstances are right, I will take the trade as well. Good night! It’s 3 am here and I’m about to die. I’m not even kidding. Toodles!